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iPad Sees First Ever Yearly Decline With 14.6M Units Sold In Q3, iPhone Remains Strong With 30M Units Sold & 20% YOY Growth
Apple today released its Q3 2013 earnings report, announcing 31 million iPhones sold in the three-month period ending June, along with 14.6 million iPad units sold. Both the iPhone and iPad sales are down from the previous quarter, but this marks the first time the iPad has seen a yearly decline in sales, a 14 percent decrease YOY.
Analysts expected Apple to sell 27 million iPhones, 18 million iPads, 3.85 million Macs, and 4.9 million iPods this quarter.
Last quarter, Apple showed a slight drop in sales from the previous record-breaking quarter with 37.4 million iPhones and 19.5 million iPads sold, while still maintaining solid year-over-year growth for both products.
This quarter’s 31 million iPhones represent a quarterly loss of 21 percent, while still being up 20 from the same quarter last year. However, the iPad is down 25 percent sequentially and is down 14 percent from last year.
Much of this can be attributed to the fact that this is a historically slow time for Apple and all CE companies, and that both devices are expecting a refresh soon.
The iPhone 5 was unveiled last fall, with the next-generation Apple smartphone expected in the fall alongside iOS 7. In terms of the iPad, the most recent refresh came in November with the availability of the iPad mini.
Of course, that Christmas quarter was Apple’s strongest yet for iPhone and iPad sales, breaking previous records for both products. But things have not-so-surprisingly slowed down since the star products’ unveiling, with many now waiting for the newer models to go on sale.
Meanwhile, Mac and iPod sales remain relatively flat from last quarter. Apple sold 3.75 million Macs in the quarter ending in June, down just barely from 3.9 million last quarter. This represents a 7 percent YOY loss, down 5 percent from the previous quarter.
Obviously, the PC market is dying all around us, so flat yearly and quarterly growth is actually quite impressive.
Mac sales usually do best during the back-to-school season. In Q4 of 2012, which goes from July through September, Mac sales hit 4.9 million, which was actually a 1 percent increase from the year before.
But during Christmas, the first full quarter of the 13-inch Retina MBP’s availability, Mac sales only reached 4.1 million units, representing a 16 percent quarterly decrease. Worse yet, it was a 21 percent fall from the same time last year. Last quarter, Mac sales were essentially flat again with 3.95 million units sold, down just one percent from the quarter before and nearly flat with the 4 million they sold in the previous year during the same period.
iPods continue to lose traction with a group of users who are increasingly interested in the iPhone and iPad, both of which offer similar, yet more robust technology.
Third quarter sales totaled 4.5 million, down from 5.63 million last quarter and a YOY loss of 32 percent.
Apple Beats In Q3 With $35.3B In Revenue, $6.9B In Profit, $7.47 EPS, But Posts Another YOY Earnings Decline
Apple has just released its fiscal Q3 2013 earnings — it reported $35.3 billion in revenue (slightly up from $35 billion in the year-ago quarter) along with $6.9 billion in quarterly net profit (down from $8.8 billion in the year-ago quarter), representing earnings of $7.47 per share. Similarly to Q2 earnings, Apple posted a year-over-year quarterly earnings decline (down from EPS of $9.32).
Apple is still a money making machine, but the company’s growth has slowed. Recently, the Cupertino-based company has tweaked its release cycle a bit. Almost the entire product line was refreshed over the last three months of 2012, pumping sales for Q1 2013 and leaving a void for the rest of the year. The company seems to follow the same pattern this year, aside from the MacBook Air.
As Zach Epstein says on Twitter, Samsung is now the most profitable smartphone vendor in the world, edging Apple with its $8.9 billion in profit.
According to Bloomberg Businessweek, the consensus among analysts was for Apple to report earnings of $7.28 per share on $34.9 billion in revenue. Fortune expected nearly the same with $34.94 billion in revenue and earnings of $7.29 per share.
“We are especially proud of our record June quarter iPhone sales of over 31 million and the strong growth in revenue from iTunes, Software and Services,” wrote CEO Tim Cook in the earnings release. “We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014,” he continued.
Breaking out the numbers, devices sales were expectedly slow this quarter. It was the first time we’ve seen a yearly decrease in iPad sales, at 14.6 million, yet iPhone sales topped 31 million representing 20 percent growth year over year. Mac and iPod sales were slightly down both quarterly and yearly, which is something Apple seemed prepared for as its other iProducts begin to cannibalize the older series of products.
Over the past few weeks, many analysts reported an industry-wide slowdown in smartphone sales. Apple keeps selling the iPhone 4 and the iPhone 4S at a lower price, and it could hurt the company’s bottom line. That’s one of the reasons why profit is down but revenue still up year over year.
Guidance from its last earnings release forecasted between $33.5 billion and $35.5 billion in revenue and gross margin between 36 percent and 37 percent. While the company used to be shy about its guidance, this time around it was spot on — it probably won’t scare shareholders away.
For Q4 2013, guidance for next quarter is revenue between $34 billion and $37 billion with a gross margin between 36 and 37 percent.
Last quarter, Apple didn’t release any product and expectations were pretty low for the company. This time around, the company unveiled a few products during a traditional and long-anticipated keynote — the WWDC keynote. The MacBook Air was updated as well as the Mac Pro. But the former was released only a couple of weeks before the end of the fiscal quarter that ended on June 30, while the latter doesn’t even have a release date yet.
And of course, the company didn’t refresh the iPhone and the iPad. In other words, Q3 was another quarter without any big new product. CEO Tim Cook hinted that it would be the case during the latest earnings call, hinting at new products coming this fall. Apple unveiled a radically new iOS 7. It gave commentators hope that exciting new products are right around the corner. Cook’s quote in the earnings release confirms that.
On the stock market side, Apple (NASDAQ:AAPL) has experienced a pretty good month of July so far. After breaking under $400 a share at the end of June, shares have been trading over $420 for the last few days. Apple shares are currently trading up 4.16 percent in after-hours trading.
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